United CFO Rainey Implies Certain Elites were "Over Entitled".
May 21, 2012, 9:05 pm
#811
Join Date: Mar 2007
Location: SBA
Programs: UA GS, MM, AA (EXP), SPG Platinum, Priority Club, Ambassador Platinum, Global Entry
Posts: 230
candy
bottom line is when you give a person a piece of candy everytime you see them year after year, you develop an entitlement atmosphere....right or wrong this is human nature
May 21, 2012, 9:05 pm
#812
Join Date: Jul 2002
Location: Virginia, USA
Posts: 4,511
What amazes me about this entire debacle, not just Rainey but going back to pre-3/3, is how a major company has managed to create so much ill-will, anger and even hatred among its best customers in such a short time.
May 21, 2012, 9:07 pm
#813
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,341
UA has a lot of different kinds of customers: employees working for companies with generous travel policies, ones at companies with miserly travel policies, government employees, people like me flying on their own nickel, business travelers, leisure travelers, kettles, etc. plus those who fly mostly domestic versus those who fly international.
The trick to running an airline successfully is maximizing revenue and profitability out of each of those groups. Loyalty and customer satisfaction is a big part of the formula, and clearly there are some tradeoffs between these groups and between profitability and customer satisfaction.
This much I think management understands. Execution is the difficult part and it requires a strong understanding of the different customer segments. It also requires intelligence to figure out good solutions where you keep your customers happy and also get them to spend more money. This is difficult but by no means impossible. The problem is that you need smart and competent management to do it. The fact that the CFO could make such a dumb statement suggests that management's competence/IQ is more in the area of pissing off customers and getting them to spend less money.
I also don't think management understands the impact of social media. In the old days you could sell off an asset (customer loyalty) and get a short term boost in profitability. Good for bonuses and stock prices. These days the investment analysts are likely to figure out this kind of scam and go sour on the company before your options vest.
The trick to running an airline successfully is maximizing revenue and profitability out of each of those groups. Loyalty and customer satisfaction is a big part of the formula, and clearly there are some tradeoffs between these groups and between profitability and customer satisfaction.
This much I think management understands. Execution is the difficult part and it requires a strong understanding of the different customer segments. It also requires intelligence to figure out good solutions where you keep your customers happy and also get them to spend more money. This is difficult but by no means impossible. The problem is that you need smart and competent management to do it. The fact that the CFO could make such a dumb statement suggests that management's competence/IQ is more in the area of pissing off customers and getting them to spend less money.
I also don't think management understands the impact of social media. In the old days you could sell off an asset (customer loyalty) and get a short term boost in profitability. Good for bonuses and stock prices. These days the investment analysts are likely to figure out this kind of scam and go sour on the company before your options vest.
May 21, 2012, 9:11 pm
#814
A FlyerTalk Posting Legend
Join Date: Jun 2005
Posts: 57,616
This sounds a lot like blaming the victim. Maybe if United was honest and up front in their communication, there would be no "pitchforks and vats of burning tar."
May 21, 2012, 9:11 pm
#815
Join Date: Jun 2005
Posts: 4,645
I don't this is fair to us. Our tone has escalated with the alternating lies and silence after 3/3. It didn't start this way. And, it never needed to come to this. And, it can be turned around.
May 21, 2012, 9:14 pm
#817
Join Date: Aug 2005
Location: HPN
Programs: not anymore! I'm FREE!
Posts: 3,459
An example of this is when our Premier tiers get access to Economy Plus seating. This change has materialized into a meaningfully better experience for our Gold members and above. In fact, in markets that have the highest proportion of Premier flyers, a higher percentage of Premier Platinum and Premier Gold members are getting access to Economy Plus (comparing February 2012 to April 2012, and comparing April 2011 to April 2012), while the percentage of Premier Silver members sitting in Economy Plus hasn’t decreased meaningfully.
Based on this devaluation, and on the 50% reduction in RDMs for Golds, I had already decided that UA is over-entitled to my airfare dollars. Good to hear that the feeling is mutual.
In my little parable, there isn't.
Last edited by snic; May 21, 2012 at 9:23 pm
May 21, 2012, 9:17 pm
#818
Join Date: Nov 2007
Location: Washington DC
Programs: Former 1k, Lifetime UA Gold, Starwood Gold; Avis Preferred; Hertz Gold
Posts: 1,732
Disclaimer - I'm a lawyer, but I've seen how effective PR can be with my clients. We can complain on FT, but if nobody hears your screams.....
May 21, 2012, 9:18 pm
#819
Join Date: Apr 2008
Posts: 2,358
Rainey is not a newbie. He was at Continental for 15 years and worked for Smisek.
Smisek is not only CEO of the corporation, he is also part of the Board of Directors.
Where is the independence under this set of facts?
Thus, the man responsible for destroying the good name of United Airlines and causing an exodus of loyal passengers, effectively, is reportable to himself.
Forget about any help from UA's Board of Directors.
-
Last edited by dgcpaphd; May 21, 2012 at 9:26 pm
May 21, 2012, 9:25 pm
#820
Join Date: Jun 2005
Posts: 4,645
I agree the tone has escalated. I don't know if this is appropriate , but would other FTers be intersted in hiring a PR agency. You can do a lot with a couple k a month. Get enough folks to pony up and I think we would be able to have a huge multiplier effect on what we do on FT.
Disclaimer - I'm a lawyer, but I've seen how effective PR can be with my clients. We can complain on FT, but if nobody hears your screams.....
Disclaimer - I'm a lawyer, but I've seen how effective PR can be with my clients. We can complain on FT, but if nobody hears your screams.....
Last edited by iluv2fly; May 21, 2012 at 9:31 pm Reason: merge
May 21, 2012, 9:29 pm
#821
Join Date: Sep 2009
Posts: 5
Especially after the Netflix debacle last summer. It's like no one learned from that, that you should avoid angering your most loyal customers, in your quest to hit certain metrics.
May 21, 2012, 9:30 pm
#822
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,341
Why should the Board of Directors be nervous?
Smisek is not only CEO of the corporation, he is also part of the Board of Directors.
Where is the independence under this set of facts?
Thus, the man responsible for destroying the good name of United Airlines and causing an exodus of loyal passengers, effectively, is reportable to himself.
Forget about any help from UA's Board of Directors.
-
Smisek is not only CEO of the corporation, he is also part of the Board of Directors.
Where is the independence under this set of facts?
Thus, the man responsible for destroying the good name of United Airlines and causing an exodus of loyal passengers, effectively, is reportable to himself.
Forget about any help from UA's Board of Directors.
-
May 21, 2012, 9:33 pm
#823
Join Date: Dec 2007
Location: Las Vegas
Programs: DL Platinum, AA Lifetime Gold, Hilton Diamond, Marriott Platinum, Radisson Premium
Posts: 6,638
May 21, 2012, 9:37 pm
#824
Join Date: Nov 2010
Location: DEN
Programs: 2012 Plat-2013 Plat-2014 Silver-2015 GM
Posts: 818
Why should the Board of Directors be nervous?
Rainey is not a newbie. He was at Continental for 15 years and worked for Smisek.
Smisek is not only CEO of the corporation, he is also part of the Board of Directors.
Where is the independence under this set of facts?
Thus, the man responsible for destroying the good name of United Airlines and causing an exodus of loyal passengers, effectively, is reportable to himself.
Forget about any help from UA's Board of Directors.
-
Rainey is not a newbie. He was at Continental for 15 years and worked for Smisek.
Smisek is not only CEO of the corporation, he is also part of the Board of Directors.
Where is the independence under this set of facts?
Thus, the man responsible for destroying the good name of United Airlines and causing an exodus of loyal passengers, effectively, is reportable to himself.
Forget about any help from UA's Board of Directors.
-
Very valid point.
I wish I weren't so naive. I'm working under the old belief that BOD's want to make sure the "entity" survives. That of course is not what American business has become. I guess with enough damage they'll have to do something, but by then, it will probably be too late.